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(Bloomberg) -- Samsung Electronics Co. has obtained approval to supply its high-bandwidth memory chips to Nvidia Corp., according to people familiar with the matter.
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The South Korean chipmaker’s 8-layer HBM3E — less advanced than cutting-edge 12-layer parts — was cleared by Nvidia in December, said the people who asked not to be named as the information is private. Those chips are going into Nvidia’s less powerful AI processors tailored for the Chinese market, one of the people said.
Nvidia’s approval has been long in the works, as Samsung races to catch up to fellow Korean chipmaker SK Hynix Inc., Nvidia’s go-to partner for supplying the most advanced HBM to pair with its AI chips. At CES earlier this month, Nvidia Chief Executive officer Jensen Huang said Samsung will have to engineer a new design. “But they can do it. They are working very fast. They’re very committed to do it.”
Representatives for Samsung and Nvidia declined to comment.
The progress, albeit small, keeps Samsung within reach of SK Hynix, which had been widening its lead by launching cutting-edge HBM chips ahead of rivals like Micron Technology Inc. SK Hynix became the first supplier to mass-produce 8-layer HBM3E in early 2024 and began supplying the more advanced 12-layer variety around the end of last year.
Shares in SK Hynix plunged as much as 12% on Friday morning, the first trading day in Seoul after the Lunar New Year holiday, reflecting in part concern about demand triggered by DeepSeek’s sudden surge to global popularity. Samsung was down just over 2%, after it reported operating profit in its chip business that fell shy of expectations. Micron fell in the US in response to news of Nvidia’s approval.
High-bandwidth memory is essential to AI tasks and has given memory makers a lucrative way to participate in the flood of spending on artificial intelligence training and development. Unlike other types of memory, the difficultly of producing it has made it highly profitable and less susceptible to wide swings in the balance of supply and demand.
Last year, Samsung’s chip division chief Jun Young-hyun apologized for disappointing results and acknowledged delays in winning Nvidia certification.
Under Jun’s leadership, Samsung has reorganized its team of engineers and ratcheted up research and development expenditure, hoping to reverse its market position with the next generation of HBM chips, or HBM4. Both Samsung and SK Hynix aim to become Nvidia’s main vendor for HBM4 chips as they work to mass-produce them in the second half of this year.